It’s amazing what a couple of lines of legislation can do. California law states that utilities would have to stop offering net metering at the end of 2014. With more residents and solar installed than anywhere else in the U.S., such an abrupt end could spell disaster for the residential solar market in the state.
In light of that legislation, AB 327 was proposed to fundamentally change how residents in California are charged for electricity and how utilities set up their net metering policies. The bill was maligned by many solar advocates and solar installers in the past but recent amendments to the bill won some solar advocates over, and AB 327 took a step forward and was approved by the state senate on Monday. It will now move on to the state assembly.
First the controversy, according to the California Solar Energy Industries Association (CALSEIA) AB 327 would impose a $10 monthly fee on all California rate-payers ($5 for California Alternate Rates For Energy (CARE) ratepayers), regardless of whether or not the customers have solar. It would also allow utilities to set voluntary time-of-use rates through 2018 before establishing required rates.
The organization also criticized that the legislation didn’t set out a date for when current net-metering policies would end.
“CALSEIA is also extremely concerned about language in the bill that directs the [Public Utilities Commission] to cancel all existing net energy metering contracts at some unspecified future date,” according to a CALSEIA fact sheet about the bill. “This language creates uncertainty and disruption in the market and unfairly threatens to change the rules on customers who have invested in solar power to date. Secondly, CALSEIA would like to see the legislation require that future solar customers will be protected from anti-solar charges, fees and taxes.”
This concern was addressed last week, and the bill has since been amended. Now AB 327 will require a transition period during which existing net-metered customers can continue receiving renumeration for the power they generate under their current contract “for a length of time determined by the commission."
CALSEIA would like to ensure that such a contract lasts for 20 to 25 years, the basis on which most calculations related to solar investments in California have relied on for years. “The economics of that investment were based largely on this statutorily protected contract. It is extremely problematic for the state government to step in and change the rules on consumers mid-stream,” it said.
California utilities are currently limited to allowing net-metering for up to 5 percent of their energy supply. AB 327 removes that cap, making sure all customers can have the opportunity to install net-metered solar. The bill also sets caps for the existing net-metering requirements in terms of megawatts instead of percentages, adding more certainty.
Still, the changes to the proposed legislation by legislators and Gov. Jerry Brown has changed the mind of some solar advocates, including the national Solar Energy Industries Association (SEIA), The Alliance for Solar Choice (TASC), and the nonprofit group VoteSolar.
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